London Daily

Focus on the big picture.
Thursday, Jul 09, 2026

Small businesses teetering on the brink as energy prices soar, Federation of Small Businesses warns

Small businesses teetering on the brink as energy prices soar, Federation of Small Businesses warns

Nearly 15% of small- and medium-sized firms polled fear they may have to close or downsize as a direct result of the spiralling energy bills, the Federation of Small Businesses says.

Spiralling energy costs are driving cafes, restaurants and independent shops all around the country to the edge of survival, according to an industry body.

The Federation of Small Businesses director Martin McTague told The Independent that soaring bills, combined with reduced consumer spending as shoppers grapple with their own household bills, is forcing thousands of small firms to make "impossible choices".

"How is an independent cafe supposed to find another £20,000 a year to keep the lights on and the coffee machine going, when they are barely breaking even as it is?" Mr McTague said.

Or how can a "small manufacturer find another £70,000 to keep the production line going and the staff room heated?" he asked.

"With five-figure annual energy cost increases common, too many small firms are being faced with impossible choices."

Almost 15% of small- and medium-sized firms expect they could be compelled to close or downsize as a direct result of the spiralling energy bills, according to a poll by the FSB.

The warning coincides with another bleak forecast that energy bills for the average household could climb a further £4,000 a year in the next eight months.

Auxilione, an independent energy consultancy, today predicted the price cap could reach £3,576 in October, rising to £4,799 in January, and finally hitting £6,089 in April.

About 45 million people are forecast to be thrown into energy poverty this winter as prices on the European gas market continue to soar.

Labour and energy industry voices have asked the government to freeze bills or top up the existing £400 bill rebate relief scheme, which could allow consumers to relax their purse strings.

But ministers have said nothing can happen until the prime minister takes office on 5 September.

"We need direct and immediate support from the government," Mr McTague told the newspaper.

"Extending energy support issued via the council tax system to the rates system, direct help with bills for those small firms which don't pay business rates, and cutting VAT on energy consumption will make a real difference in this space."

Newsletter

Related Articles

0:00
0:00
Close
Barclays and PwC Report Examines Economic Opportunities from Financial Asset Tokenisation
Pound Sterling Strengthens as Investors Anticipate Further Bank of England Rate Increases
British Business Bank Invests Twenty-Seven Million Pounds in Kraken Technology Defence Expansion
UK Business Secretary Peter Kyle Backs State Investment Strategy Inspired by US Approach
UK Electricity System Issues Margin Notice as Heatwave Tightens Evening Supply Outlook
Labour Leadership Contest Opens as Andy Burnham Emerges as Expected Sole Candidate
Tech Pulse: The Future of AI and Screen Culture
Global News Briefing: Escalating Geopolitical Tensions and Corporate Shakeups
Global News Brief: Escalating Conflicts, Public Health Crises, and World Cup Drama
Rare Early Copy of US Declaration of Independence Found in British Archive
Cornish Language Revival Gains Momentum Through Schools and Community Programs
UK Authorities Face Criticism Over Prisoner Early Release Safeguards
Clacton By-Election Set After Nigel Farage Resigns Seat to Trigger Contest
Government Agencies Review Long-Term Fiscal Risks from Aging Population and Low Productivity
UK Heatwaves Expose Pressure on Public Transport and Housing Infrastructure
UK Government Prepares Welfare Review Amid Debate Over Personal Independence Payment Reform
UK Government Expands Rapid Endometriosis Testing Across NHS Services
Vistry Group Issues Profit Warning as UK Housing Market Faces Continued Pressure
Virgin Media Receives Record Twenty-Eight Million Pound Fine Over Contract Cancellation Failures
Office for Budget Responsibility Warns UK Public Finances Face Long-Term Pressure
UK Watchdog Warns Regional Income Gap Has Barely Narrowed in Three Decades
IMF Raises United Kingdom Growth Forecast as Inflation and Energy Pressures Ease
UK Government Launches Regulatory Reform Bill to Speed Up Commercialization of Innovation
Prince Harry Loses Privacy Lawsuit Against Daily Mail Publisher After High Court Rejects Claims
Federal Financial Framework Shifts as Treasury Launches Universal Savings Program for Minors
Jet2 Reports Strong Summer Travel Demand as Bookings Rise Seven Percent
Prince Harry Loses High Court Privacy Case Against Daily Mail Publisher
British Universities Warn Against Potential European Union Tuition Fee Changes
Heal Fertility Clinic Investigated After Embryo Biopsy Sample Mix-Up
Resolution Foundation Warns Regional Income Divide Has Barely Improved Since 1997
British Markets Remain Cautious as Middle East Tensions Rise and Government Transition Nears
Andy Burnham Poised to Become United Kingdom Prime Minister in Expected Political Transition
Nigel Farage Resigns as Member of Parliament Ahead of By-Election Amid Funding Investigation
Trump Declares Iran Ceasefire Over After Renewed Attacks on United States Bases
French Court Allows Le Pen to Run for Presidency, but with an Electronic Tag: "I Will Appeal, and I Will Run"
$1.4 Trillion: The Lawsuit That Could Crush Meta
Europe's Growing Struggle with Extreme Heat and Air Conditioning
UK Daily Briefing: Legal Developments and Social Issues
Political Turmoil and Rising Costs
Anthropic Reengineers Agentic Architecture to Shift Autonomous Workplace Automation to the Cloud
Logic Flaw in Windows 11 Permission Architecture Silently Consumes Hundreds of Gigabytes of Local Storage
Apple Advances Late-Stage Operating Systems with Fourth Beta Deployments
Global Crisis Alert: Escalating Middle East Tensions and UK Political Upheaval
UK Parliament Pushes for Greater Domestic Control Over Critical Technologies
UK Parliament Warns Trade Fair and Exhibition Industry Is Losing Global Competitiveness
Police Launch Murder Investigation After Mother and Two Children Found Dead Near Bedford
British Chambers of Commerce Survey Shows Business Confidence Falls to Post-Pandemic Low
UK Parliament Report Warns Britain Risks Falling Behind in Artificial Intelligence Sovereignty
Office for Budget Responsibility Warns United Kingdom Faces Long-Term Fiscal Pressures
Nigel Farage Resigns as Member of Parliament Amid Financial Scrutiny and Triggers By-Election
×